What is Turnover Tax?

Turnover Tax — often shortened to TOT — is a simple tax for smaller businesses. You pay a flat 5% of everything you sell. Not your profit: your sales.

How it works

Each month you add up what the business took in — all your sales, before you subtract anything. That figure is your turnover. You pay 5% of it to ZRA.

There are no deductions. It does not matter what you paid for stock, rent, wages or transport. That is the trade-off: Turnover Tax is far simpler to work out than income tax, but it takes no account of whether you actually made money that month.

Who pays it

Turnover Tax is for businesses whose annual turnover stays at or below ZMW 5,000,000.00. Go above that and you are no longer eligible — you move onto standard income tax, which is charged on profit instead.

Which figure is current? ZMW 5,000,000.00 is the Turnover Tax threshold following the 2025 reform. You may still see the older ZMW 800,000.00 figure quoted in guides and in places on the ZRA website that have not been updated — ZMW 5,000,000.00 is the one that applies now. Confusingly, ZMW 800,000.00 is also the VAT registration threshold, which is a separate rule and has not changed. Seeing that number does not mean it is the Turnover Tax limit.

The threshold is measured across the year, not per month. A shop selling ZMW 450,000.00 a month will cross ZMW 5,000,000.00 well before December, so it is worth watching the running total rather than waiting for a surprise.

When you pay

Turnover Tax is monthly. The return and payment for a given month are due by the 14th of the following month — so March's tax is due by 14 April. There is no grace period, and filing late attracts penalties and interest.

The exemption floor

Very small months are not taxed. If your turnover for a month is at or below ZMW 2,500.00, no Turnover Tax is due for that month — though you should still keep the record.